On today (July 20) morning, the People’s Bank of China issued an official message stating that in order to further improve the macro-prudential management of full-scale cross-border financing, continue to increase the sources of cross-border funds for enterprises and financial institutions, and guide them to optimize their asset and liability structures, the central bank and the State Foreign Exchange The Authority has decided to increase the macro-prudential adjustment parameters for cross-border financing of enterprises and financial institutions from 1.25 to 1.5, which will be implemented on July 20, 2023.
Affected by this news, the exchange rate of RMB against the U.S. dollar in the foreign exchange market rose sharply that day. From the perspective of the entire July, the spot exchange rate of onshore and offshore RMB against the U.S. dollar has risen by more than 1,000 basis points.
